Network Solutions’ Chinese strategy

Domain names being handed out to Beijing government

By

DeborahAdamson

HERNDON, Va. (CBS.MW) -- Network Solutions said Wednesday it was giving away 300 domain names and discounting several thousand others for the Chinese government’s use, in one of the first corporate overtures toward the world’s most populous nation since last week’s House vote in favor of normalizing trade relations.

Chinese officials get to pick the domain names, which likely will be phonetic versions of names of government agencies, the company said. By the end of the year, Network Solutions hopes to enable Web site names in foreign characters.

The gift represents a drop in the bucket for the company (NSOL), which handles 10 million registered domain names. However, its olive branch toward Beijing is a savvy strategy in a potentially lucrative market where authorities exert strict business controls.

Network Solutions plans to take a growing share of China’s Web address-naming registrations, a key part of its Asia-Pacific strategy.

Doug Wolford, general manager of the registrar for the company, told CBS.MarketWatch.com that while Network Solutions already is making big inroads into China, the opening of this Asian market represents a “substantial amount of business down the road.”

At present, about 40 percent of Network Solutions’ business comes from outside the U.S., and a third of that is generated from Asia, Wolford said. In the next few years, Network Solutions expects two-thirds of revenue to come from foreign shores - and half of it generated in the Asia Pacific region.

“It’s going to be an Asian Internet,” Wolford said.

In February, China was number seven on the list of top 10 countries registering domain names, according to an internal index. What’s more impressive, he said, is that China made the top 10 even though Net use in that country only stood at 0.57 percent of the population.

On Wednesday, a company executive presented Zuo Feng, deputy director of data communication for China Telecom, with a domain name for the Information Industry Ministry. China Telecom has spearheaded a program to get the government online - over 3,000 departments have registered domain names. Wolford said it’s protocol to deal with the government’s agent.

The phone company will aid Network Solutions in registrations. Network Solutions typically works with local companies for domain name registrations, deferring to their expertise in the respective cultures. It has 70 partners worldwide, 15 of which are in China.

While Network Solutions is the largest domain name registration company in the world, it faces 140 foreign competitors.

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